Due diligence is needed to ensure the safety of both parties during the M&A process, especially the buyer’s side. The selling company must provide the interested party with all the necessary documents so that they can be convinced of the transparency of their schemes and make an informed decision. This process requires a large amount of confidential information, and many companies use virtual data rooms to securely store and share it. In this article, we will explain in more detail how VDRs help you with due diligence.
What is a due diligence data room?
The due diligence data room is an online space where companies store their valuable data such as contracts, financial and accounting reports, legal information, and intellectual property. That is, everything you need to conduct transactions and due diligence. All documents are in a completely secure space, which allows them to be exchanged with a third party within the program without the threat of data leakage. Users who have been allowed to view documents can do so from their office and slowly analyze all submitted files.
Previously, all these processes were conducted live using physical data rooms, but with the advent of the Internet and new technologies, data rooms have proven their advantage over the old way of storing documents. benefits.
Virtual Data Room Features for Due Diligence
data room due diligence is an indispensable tool in many companies, and there are several good reasons for this. They provide functions that no other program will give you, and they are:
- Manage user activity
During due diligence, your potential customers view a lot of documents, and you, as an administrator, can track their actions and see which documents were viewed. This allows you to determine what your clients are most paying attention to and have a clearer message about their interests by the next meeting.
- Detailed access control
The access control feature will help you clearly define which users should have access to certain documents. Since the user group consists of professionals from different fields (financial, legal, etc.), you can provide them with a view to documents that relate only to their case. It also helps a lot in organizing all your folders and files.
- Dynamic watermarks
Watermarks are installed on documents, preventing them from being viewed, which reduces the risk of data leakage. Also, with their help, you can see who accessed the document and their time spent there.
- Safe printing
Let’s say that you have been granted access to print a document for a specific user. The secure print function ensures that after printing, this file cannot remain saved on the user’s device, where it can be easily intercepted by ill-wishers
- Convert files to PDF
With its help, you can easily massively transform all files in the data room into PDF format. This provides you with a guarantee that the documents will remain in this form until the end of the due diligence, plus it will be easier to track changes.
- Questions and answers
This function is a kind of communication between the two parties, which allows you to clarify some points of the transaction without leaving a safe space. When the question is left, you will instantly receive an SMS to your email.
- Date of expiration
When you grant temporary access to your data room to a third party, you can set expiration dates on documents, after which access to them will become unavailable. This can be done remotely or in advance.